Published: 27 January 2005
If private building certifiers thought the leaky homes crisis was bad, the Government gave those who remain in business another kick yesterday.
The Department of Building & Housing issued a statement warning people using private building certifiers to be aware “that certifiers may not have adequate insurance cover against potential claims of negligence, particularly if the certifier does not continue in business.”
Lack of insurance cover â€“ or prohibitive premiums – forced many private certifiers out of business in 2004 as the Government & local councils shunted blame for the leaky homes episode on to the certifiers.
The warning from the department’s building controls general manager, John Ryan, comes during the final stages of a comprehensive review, begun by the former Building Industry Authority, of the indemnity insurance building certifiers are required to have.
The Building Act requires certifiers to carry insurance to cover their liabilities, one form covering negligence claims for 10 years from completion of a job, the other giving customers 10 years’ cover if the certifier goes out of business.
Mr Ryan said because certifiers couldn’t get insurance to cover weathertightness for leaky-building risks, the Building Industry Authority restricted the type of work they could undertake to work they could get insurance cover for.
The authority then began its formal review.
As a result, the new department has proposed a new specification which it’s consulting certifiers & other interested parties about.
Mr Ryan said a key change in the proposed specification is the requirement for certifiers to buy run-off cover in advance, doing away with the need for a bond.
Without that, certifiers won’t be able to renew their approval to operate as a building certifier.
Mr Ryan said the department expected a new specification to be in place in March after feedback on the proposals is considered.
Other changes include introducing the new Building Act, with requirements for accrediting certifiers & licensing builders.
Mr Ryan said a number of private certifiers were forming subcontract arrangements with councils.
Website: Department of Building & Housing